GBP/USD Rally Fails at Former Support

DailyFX

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eliottWaves_gbp-usd_1_body_gbpusd.png, GBP/USD Rally Fails at Former Support

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The Jan 2nd close at 1.6252 nailed the high so far, which came in at 1.6259. Resistance is reinforced by a 4 year resistance line.

-A key reversal week (new high and close below prior close) unfolded 2 weeks ago.

-A multi-week head and shoulders top has been confirmed. Underside of the neckline (red) is now estimated resistance along with former lows from 1.6000-1.6030. Price traded in this zone and failed on Monday.

Trading Strategy: 1.6030 short entry wasn’t missed by much as GBPUSD traded into 1.6017 on Monday. Strategy needs to be altered in order to catch a larger breakdown. Order to short 1.5950, stop 1.6020, target 1.5655. If not triggered, then we may get an opportunity to short at higher prices.

LEVELS: 1.5840 1.5913 1.5965 | 1.6017 1.6050 1.6093

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